Capitalists and Climate

A number of the world’s political leaders are currently making a lot of fuss about their business credentials. The President of the United States is a “dealmaker.” The Prime Minister of Australia tells him on the phone that because they are both “businessmen” they understand each other and their “transactional” instincts. In other words, political exchange is not driven by any underlying ideal, but merely a quid pro quo. Although, to tell the truth, Malcolm Turnbull is less a businessman, and more, like the President of France, a banker, although Emmanuel Macron honed his “business” skills in the corridors of the Paris-based Rothschild investment bank, Turnbull at the “global” Goldman Sachs. In today’s world, both businessmen and bankers seem to fit comfortably into the business-suited profession that is politics. Trump is no banker, but his “Make America Great Again” government has been called “Government Sachs” precisely because of the number of that one bank’s alumni now responsible for governing the most powerful nation on earth.

For anyone who remembers the global financial crisis of 2008, it might seem odd to see so many bankers in government, even if bankers, like businessmen, have always influenced politics. At the height of the crisis, banker had become a profession hard to admit to. After all, Goldman Sachs, it was discovered, had played a critical role in accelerating the crisis by unconscionably selling dubious mortgage-backed securities. After the collapse, there was a tendency to view bankers as the problem, not the solution. Governments put regulations into place to manage their individual and collective behaviors (Goldman Sachs was fined $5 billion, although bankers avoided individual culpability, and banks also benefited from government bailouts). In less than a decade, it might feel better to identify as a businessmen, but bankers too are unabashedly back.

The extent of business and banking influence in government is of course not new. Historians of capitalism have been writing for a long time about the close connection between the rise of modern political forms and practices, and the capital- and credit-raising activities of financiers. In Louis XIV’s France, bankers had extensive roles funding war. A century later, in Louis XVIII’s France, bankers were at the forefront in peacetime, helping make the reparations payment for Napoleon’s wars, or, as in other parts of Europe, funding state-building, and imperial expansion. That same period saw the birth of the international bond market as a popular transnational market in sovereign debt that had its own bubbles and burst—with devastating effects on small-time investors and the banks themselves. Regardless, bankers repeatedly offered enormous loans to Europe’s states—whether Prussia, Russia, Austria, Spain, Portugal or Britain, or other countries we no longer talk about, like the Kingdom of Two Sicilies, or revolutionary proto-states, like Greece or Haiti. Parceling and selling on the debt to private subscribers at a profit, bankers funded bridges and railways, bureaucracies, navies and armies, giving modern forms to the Europe’s empires as well as nation-states.

From the nineteenth century, European bankers and businessmen were also to be found funding transnational causes that were at the time thought of as humanitarian in one way or another, from Jewish rights to the emancipation of Christian Greeks from Ottoman rule, and occasionally anti-slavery. Through the twentieth century, bankers and businessmen (and it was mainly men who identified with these careers) were not only the backbone of nation-building, they also supported projects that linked national interests with the cause of peace and prosperity, shaping the global world.

Which brings me to one of the more curious places in which we find them in the 1970s—the decade historians of internationalism associate with the rise of a global consciousness and ‘casino capitalism’. In the same crucial years that saw the escalation of tax havens, transnational flows of money, and unregulated private banks, bankers and businessmen were just as likely to take other aspects of global politics as seriously, working through the United Nations. In other words, when we follow the money in the 1970s, we find bankers and businessmen taking key roles in the establishment of global environmental governance, and the promotion of its key ideas.


The history of businessmen and bankers in the invention of international environmental governance has not really been studied. But we do not need to look very far to find the evidence, particularly if we go back to the preparations leading up to the 1972 United Nations Conference on the Human Environment. For historians of the environment, and of internationalism, this conference counts as the first time environmental problems were tackled on a comprehensive and global basis. It was held in Stockholm in the early summer of that year, and attracted representatives of 113 governments and 700 non-government accredited observers, as well as a broader public who attended or could watch proceedings on TV. The conference was the brainchild of the Swedish government, which, in 1969, called on the UN to hold a conference that would encourage governments and international organizations to take action on the human environment. By choosing the concept of ‘human environment’ they focused not just on the natural world, but, as was intellectually fashionable at the time, on the milieux that humans shaped, and in which they lived, affecting health and well-being, at the time and into the future. The UN General Assembly took a resolution to organize a conference that would emphasize international cooperation, and pay special attention to the economically precarious position of developing countries. There was an acute awareness in the galleries of the UN that any plan to manage the world’s environment had to account for the effects of industrialization. Those effects, it was agreed, were mostly the responsibility of developed countries, in contrast to the poorer, often former colonial states still only at the beginning of their industrial journey to modernity. After all, decades of UN and U.S.-led—in many cases Cold War inspired—development policies had tied the future prosperity of those new nation-states to their ability to industrialize.

Three years later, the Stockholm conference put the international governance of the environment on national and NGO agendas. It created new methods and organs for that governance, including the UN Environmental Program. Businessmen and bankers had a hand in all these developments. Right at the top, as the appointed conference “Secretary-General” sat a Canadian oil-man, Maurice Strong. Strong filled his advisory council with men such as Robert McNamara, the self-described ‘business executive’ and World Bank president who oversaw largescale development projects in the Third World (before which he had been the U.S. Secretary of Defense most associated with the quagmire of the Vietnam war, also known as “McNamara’s War”). Then there were the NGO’s such as the International Chamber of Commerce—an organization invented in 1919 ‘to serve world business by promoting trade and investment, open markets for goods and services, and the free flow of capital. The ICC involved itself, and was called upon by Strong, in the planning for the conference. For example, prior to the Stockholm conference, ICC executives arranged a meeting in another Swedish city, Gothenberg. There they adopted a resolution calling for the establishment, as a matter of urgency, of an official link with the UN unit working on the environment. They co-sponsored ‘Business Leaders Briefings’ in Paris, in February 1972, and at UN Headquarters in May that same year. At both briefings, funded by U.S. companies such as American Metal Climax and Continental Can, Secretary-General Strong set forth the central aims and likely consequences of the Stockholm conference. In UN documents, and Strong’s own papers, we find evidence that he afforded business leaders an opportunity to be involved in the international planning for the conference, and whatever program might be developed there for the future.

Few contemporaries would have been surprised to see businessmen take such a lively interest in a UN global initiative. The ICC had put their hands up for NGO status at the League of Nations, and then, even more eagerly at the UN. Businessmen and bankers were prominent in the more than one century-old international organization known as the YMCA (Young Men’s Christian Association). The members of the YMCA who involved themselves in the preparations for Stockholm were hardly your typical young Christian men; they worked for Chase Manhattan Bank’s New York and Denmark offices, and the Institute for Interindustry Data, Inc., New York. Businessmen and bankers also appeared in the contemporary ‘world federalism’ movement, and exploited their existing connections with Maurice Strong to connect with the organization of Stockholm.

In March 1972, some members of the World Association of World Federalists who planned to attend Stockholm met at St. George’s House, Windsor Castle. Alongside representatives from the British Parliamentary Group for World Government, and the French-based international law association (Association pour le droit mondial), sat the President of Business International Inc. N.Y. (formerly secretary for Agriculture in U.S. President Lyndon B. Johnson’s administration), the Vice-Director of Pharmaceutical Division Biological Research, CIBA-GEIGY, Ltd., Basel; and the Senior Consultant to Royal Dutch/Shell Group of Companies on Environmental Conservation who was also a Member of the Royal Commission on Environmental Pollution, UK. Their meeting minutes tell us that these men criticized the forthcoming UN conference for its “too modest” approach given the “magnitude of the rapidly accumulating problems of environmental degradation.” They wanted more discussion of the international arrangements for management of environmental problems in the future.

Business was also represented in the major text that was produced as a background document for the conference, titled Only One Earth, still to be found in most libraries. Its author Barbara Ward was a British economist and Albert Schweitzer Professor of Economic Development at Columbia University. Ward’s time out from her university job was paid for by the World Bank under instruction from McNamara (a fellow Catholic and her close friend), and another businessman-cum-oilman, Robert O. Anderson.[1] Ward’s job was by no means easy; she had been tasked with writing a preliminary draft that more than 100 independent experts would then comment on before a final version was published. The book lists pages of names of these experts, some natural, social and political scientists, philosophers, humanists, statesmen, and businessmen chosen by the ICC.

It is worth reflecting on the content that made it into Only One Earth, at the least because it resonates so strongly the themes that continue to shape how we think about challenges to the environment nearly fifty years later. Barbara Ward’s version emphasized the importance of making coal cleaner, reducing CO2, developing public transport and electric cars, and alternative sources of energy to replace the nursery phase of fossil fuels. When it came to nuclear energy, she thought it a dangerous promethean fire, warning the reader off by listing radioactive waste and accidents. Noise pollution and the health effects of tobacco were also on her agenda. Measured against IPCC reporting since, her statistical prediction of the extent of global warming for the year 2000, although a minor part of the story at that time, turned out to be correct.

Ward’s text canvased ideas that still seem radical today, including pricing pollution. She referred to the “diseconomy” of the treatment of air and water as “free goods,” and demanded debate about ‘the calculus of who shall pay’ the costs in health care and quality of life when pollution was at fault. She supported an international tax system, as well as “world insurance system” to clean up environmental messes in poor cities. She called for an international authority that could take responsibility for dealing with environmental disasters. From Ward’s perspective, planetary order, the establishment of more international governance, was crucial for meeting transborder challenges in the “last remaining areas [of] the seamless web of air and water ….” Of course not all her “expert” readers agreed with her (or each other).

Amongst the more dubious were the International Chamber of Commerce nominees: the president of Imperial Oil (Canada), the Chair of Bayer (West Germany), the executive of Nippon Steel Corporation, Scandinavian Airlines System, Fiskeby (the Swedish pulp and paper group), Shell Chemicals (London), Tata (New Delhi), and the Ford Motor Corporation in Michigan. Predictably perhaps, SAS rejected the extent of noise pollution produced by planes, others cast doubt on the science that claimed changes in the ozone layer lead to skin cancer. Ford disputed that lead compounds from car exhaust were bad for health, others that excessive pollution existed issues in cities or in oceans. The fossil fuel companies objected to the verb “ransack” to describe the acts of “prospectors” for oil who (using a preferred verb) “roam the world looking for new supplies.” Most accepted the need for an antipollution mentality but wanted it balanced with the need for economic growth. Despite these criticisms, only minimal changes were made to the text. There was some accommodation of the sensitivity of oilmen, and their preferred verbs.

Ultimately, the UN authorized publication that was intended as a foundation document, although published in numerous languages was not a big-seller. It was overtaken by another book, Limits of Growth, the brain-child of the Italian businessman, Aurelio Peccei, founder of the Club of Rome. In 1972, Peccei was one of four speakers invited by Ward to present a lecture in the distinguished “Who speaks for the Earth?” series organized as a prelude to the formal opening of the Stockholm conference. By then, Peccei had a long business career behind him, working for Fiat in Latin America for the Italian industrialist Agnelli, and then in pre-Communist China, and as Vice-President of Olivetti. By the 1960s he was manager of Italconsult, and set up a Private Investment Bank ADELA that operated in Latin America to promote development. When Peccei established the Club of Rome, many of his members were also involved in his banking enterprise.

Published in March 1972, in over 30 languages, Limits of Growth eventually sold more than 16 million copies. It earnt a reputation as an influential treatise on global governance that was produced privately, rather than by the UN or a government. Peccei had used Volkswagen funding to pay Boston-based MIT researchers to develop data driven world-modelling. All kinds of information on population numbers, industrial and agricultural production, and the environment was fed into this early example of a data computing project. The outcome was a prediction about the environmental crisis that loomed if brakes were not put on population growth in the Third World. In his speech at Stockholm, later published as Who Speaks for the Earth, Peccei argued, in quite dramatic terms, that the problem was overpopulation, and more specifically, the apocalypse of 6 to 7 billion people crowding the globe by the year 2000, all aspiring to the same quality of life as had been achieved by developed nations. The Limits of Growth ended up reflecting Peccei’s neo-Malthusian views of the source of environmental problems—too many people in the Third World—and the need for an answer developed through global governance in the hands of experts, including businessmen. In a number of related publications about his views and his life, Peccei offered himself as “a man of industry, I always say that if the terms of a problem are clear, even a mediocre manager can passably handle it.” The point of the Limits of Growth study was to make the problem as clear as possible.

As we try to understand how business networks their combinations, and discussions—fit into a bigger picture of an evolving international political culture, it helps that the contemporary Dutch journalist William Oltmans was similarly curious and asked Strong why he thought working for the UN was important. Strong answered he was trying to do something for the next generation, his own children, that was more than leaving them fat wallets. Of course hindsight reveals that for Strong it did not end well— although it took a while. In the 1990s, he was accused of accepting bribes in the Food for Oil scandal, and ended up in self-imposed exile in China.

During Stockholm and after, the Club of Rome led by Peccei grew its relatively invisible relationship to the UN under the Austrian-born UN Secretary-General Kurt Waldheim [1972-1981]—which is stranger still if we think of Waldheim’s Nazi past, including his wartime career as a Wehrmacht soldier (although he was only outed in the mid-1980s), and Peccei’s self-identified anti-fascism seeded in interwar Italy. Peccei claimed he was the last graduand from Torino university to refuse to wear a black shirt. He not only identified with the social democratic resistance, he claimed to have been imprisoned during the war for his anti-fascist activities. Should we care about what Peccei thought? The Swedish (Nobel Prize-winning) economist Gunnar Myrdal, who gave the lecture that preceded Peccei’s at Stockholm didn’t. Or at least he made clear his distaste, attacking Limits of Growth for its careless use of data, and realistic pretensions.

Despite serious criticisms of the method of Limits of Growth, within what we might term an international public sphere, the Club of Rome—which Peccei described as a collegio invisibile—continued to have a prominent place. That invisibility, or lack of transparency, is precisely what worried so many critics of the Club of Rome at the time. Historians since have also begun to reconsider the kinds of political influence and agency exercised by non-government actors in the international sphere, in many cases with little oversight or transparency. Within the UN bureaucracy, the Club of Rome was regarded by some bureaucrats who worked for Waldheim as controversial precisely because of its influence, and the hubris of its ambitions to speak for the earth.

The history of the events surrounding the 1972 Human Environment Conference show us that the governance of the world’s environmental problems goes back further in history than the recent memories of Paris and Kyoto protocols tackling climate change. We have the UN to thank for bringing knowledge of climate change, as well as other environmental issues to the fore. The (relatively unread) documents from this period, make it clear that for many UN and NGO organizations getting bankers and businessmen involved was an important way of giving legitimacy to the environmental cause, and hopefully providing it with financial resources. This same history brings to life the changing status of men who identified themselves as different from politicians and bureaucrats because they were businessmen, able to “get things done,” to manage, and make deals. We cannot expect that these men were all driven by the same motivations, but it is notable that few felt themselves confined to the realm of the deal or transaction. Peccei is an obvious example.

The closer we look at the part played by Peccei and Limits of Growth, the clearer it becomes that the impact of any one person’s interventions cannot be limited to his motivations. Whatever Peccei intended, the current way of thinking about sustainability, with all its limitations, is the product of the intervention of businessmen and bankers in debates from this period—as a kind of compromise from the more realistic utopian options available at that time. Ironically this was a language Peccei would also use. In the setting of 1970s environmental politics, Peccei did not shy away from a language of ideals, he argued the importance of having “the courage of Utopia” as “the only way to be truly realistic. Realpolitik has become obsolete—we need a new Realutopie.” In a later collection of talks published as One Hundred Pages for the Future, Peccei even emphasized that “‘modern’ economics has let us down…the current practice of economics is out of tune with the fundamental interests of humanity.”

We now know so much more about how, in the decades since 1972, oil companies and other vested interests invested in climate change denial. Half a century later, the complex story of capitalists engaging the climate exposes the inertia of global actions in response to the environmental challenges of industrial modernity. From the perspective of the present, then, it might seem counterintuitive to find that ‘following the money’ at that crucial moment in environmental history allows us to see bankers and businessmen standing up for the environment, and even the importance of principles of social justice in determining economic policy. The difference between then and now also offers a telling context for how we hear our current businessmen- or banker-politicians talk about what they can do, even how far they have travelled from the realism of ‘utopian’ global and international thinking.

[1] Anderson was the chief executive of the oil company best known for drilling in the Arctic, Atlantic Richfield, and a key donor of the think-tank created by German refugees, the Aspen Institute, which still features in U.S. political life.

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About Glenda Sluga

Glenda Sluga is Professor of International History, and ARC Kathleen Fitzpatrick Laureate Fellow at the University of Sydney She has published widely on the cultural history of international relations, internationalism, the history of European nationalisms, sovereignty, identity, immigration and gender history. In 2013, she was awarded a five-year Australian Research Council Laureate Fellowship for Inventing the International - the origins of globalisation. Her most recent book is Internationalism in the Age of Nationalism (University of Pennsylvania Press, 2013) and with Carolyn James, Women, Diplomacy, and International Politics (Routledge, 2015). She is currently completing two ARC-funded studies, one on the Congress of Vienna, and the other on the early years of the UN. She is also editing with with Patricia Clavin, Twentieth Century Internationalisms, A History (CUP, 2016); and special journal issues on 'Provincializing Europe' (with Jan Rueger, and Maurizio Isabella); most recently she edited a special issue of Modern Intellectual History on 'Global Liberalisms', with Tim Rowse (2015). In 2002 she was awarded the Max Crawford Medal by the Australian Academy of the Humanities. In 2006 she was appointed a member of the International Scientific Committee for the History of UNESCO. In 2009 she was elected to the Australian Academy of the Humanities. In 2012 she won the inaugural Faculty of Arts and Social Sciences Research Mentoring Award. In the past she has been a visiting fellow at the University of Vienna, Centre for History and Economics, and Charles Warren Centre, Harvard University, the Fondation Maison des Sciences de l’Homme, Paris, the University of Bologna, Clare Hall, Cambridge University, Leiden University, the European University Institute, Monash University and the ANU. In 2016, she will be a Visiting Fellow at All Souls College, Oxford.

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